Saturday, April 3, 2010

Today I followed this link from Brad Delong's and read a very nice story on how quickly the Internet would change the business model of TVs. Here is the into:

"I gave a talk last year to a group of TV executives gathered for an annual conference. From the Q&A after, it was clear that for them, the question wasn’t whether the internet was going to alter their business, but about the mode and tempo of that alteration. Against that background, though, they were worried about a much more practical matter: When, they asked, would online video generate enough money to cover their current costs?

That kind of question comes up a lot. It’s a tough one to answer, not just because the answer is unlikely to make anybody happy, but because the premise is more important than the question itself.

There are two essential bits of background here. The first is that most TV is made by for-profit companies, and there are two ways to generate a profit: raise revenues above expenses, or cut expenses below revenues. The other is that, for many media business, that second option is unreachable.

Here’s why...."

The article then goes on and talks about how too much complexity can destroy societies. This reminded me of Collapse by Jared Diamond, which I highly recommend, on what made several different societies collapse over our history.

More important that how TV will be affected by the Internet, is how Western developed countries (Europe, the US, and Canada) will manage their complexity and the emergence of China.